New Mexico 2019 Legislative Session Recap: State Budget

April 1, 2019

In recent years, New Mexico legislators faced lean budgets that required spending cuts and freezes across state government in order to meet balanced budget requirements in times of depressed revenues.

This year was different. Coming into the legislative session that began in the middle of January and just recently concluded, lawmakers had a budget surplus in excess of one billion dollars largely due to record-setting oil and gas development in the state.

While production is primarily concentrated in the southeast and northwest corners of New Mexico, residents around the state reap the rewards.

“Oil and gas development in southeastern New Mexico is a windfall for our area in driving growth and job creation, but its benefits are felt across the state… New Mexico has a $1.1 billion budget surplus for next year and 80 percent of that is from oil and gas,” John Waters, executive director of the Carlsbad Development Department, said before the session began.

After negotiations between the House and Senate, the budget passed by the full legislature boosts spending for fiscal year 2020 by about $705 million, an 11.1% increase over the current year.

The bulk of new spending – nearly half a billion dollars – will go toward the state’s public education system, bringing school spending above $3 billion and increasing salaries for teachers and most school personnel by 6%.

In all, “the budget will put well over $3 billion into our schools, a much-needed infusion for public education that will raise teacher salaries and extend learning programs to more students throughout the state,” according to Las Cruces-area legislators Senate President Pro Tempore Mary Kay Papen and House Majority Whip Doreen Gallegos.

A skilled and educated workforce begins with a strong public education system and will be critical to attracting new industries and enabling existing businesses to expand.

“If you ask me what relevance an underperforming education system has on our economic development and ability to attract and grow companies, the answer is everything,” Terri Cole, president of the Greater Albuquerque Chamber of Commerce, told Searchlight New Mexico last year.

Papen and Gallegos also wrote that the “unprecedented revenue surplus” is providing opportunities for New Mexico to increase spending in other areas, while still keeping money in reserves:

The budget also puts more money into our institutes of higher education and sees big increases for the Health Department and the Children Youth and Families Department, for programs serving people with developmental disabilities and providing increases for child protective services and pre-kindergarten. And while the larger budget has allowed for significant increases in spending for much-needed programs around the state, we are leaving a responsible balance in the general fund of about 20 percent of the budget.

Importantly, the legislature’s budget also includes $250 million from the general fund for much-needed road projects around the state. New Mexico Voices for Children noted, “the Legislature and Governor were wise to invest some of the state’s oil-boom revenue surplus in building our infrastructure” and said the state should continue making “long-term infrastructure investments that support a 21st century economy.”

State economists are also predict higher revenues for next year while other recent developments – such as the largest continuous oil and gas resource potential ever measured sitting partially underneath our state – give reasons to be optimistic about New Mexico’s budgetary future.